Did you know that most IRS taxes can be eliminated in bankruptcy? Although the general rule is that taxes are non-dischargeable, most taxes can be eliminated in bankruptcy after a certain amount of time has passed. Income taxes can be discharged in bankruptcy if more than three years have passed since the taxes became due and your tax returns have been filed for at least two years.
For instance, taxes owed for the year 2007 become due April 15, 2008. So in most cases, if you filed your tax return timely, then the taxes are dischargeable on or after April 16, 2011, because more than 3 three years has passed since the taxes become due and your tax return has been filed for at least two years. The same rules apply to all previous years. So in theory, all taxes that were incurred prior to 2008 may be dischargeable in bankruptcy.
Of course there are many exceptions to the general rule and certain tolling events may extend these time periods. Filing your bankruptcy prematurely may jeopardize your ability to eliminate the taxes. In this regard, only an experienced bankruptcy attorney should give you advice as to when your taxes will become dischargeable. Also, there is no reason to hire a so-called "tax expert" to eliminate or negotiate taxes because as set forth above, most taxes can be eliminated through the bankruptcy process.
Contact our lawyers at P.R. Smith Law Group to learn about your financial situation. Schedule a free consultation at our office. Call us at 888-682-5251 or send us an email to get started today
